The Euro continues growing. Overview for 16.11.2020

The major currency pair continues rising on Monday; market players are still interested in risks.

EURUSD is growing early in another November week. The current quote for the instrument is 1.1864.

The currency market is still quite interested in risks despite the fact that the second wave of the COVID-19 pandemic is spreading extremely fast around Europe and the USA. Last week, market players were pretty happy to hear the news about the vaccine but these emotions died down, just as expected.

The Euro managed to survive even after the Euro Area reported on its GDP for the third quarter of 2020. According to Eurostat, the region’s economy showed -4.4% y/y against the expected reading of -4.3% y/y. However, on QoQ, the indicator showed 12.6% after being -11.8% the quarter before and against the expected reading of 12.7%. The components of the report showed that all major economies in the region posted record GDP expansion rates: France (18.2%), Spain (16.7%), Italy (16.1%), and Germany (8.2%).

The USA reported on the Michigan Consumer Sentiment, which showed 77.0 points in November after being 81.8 points (the highest over the last seven months). Market expectations imply 82.0 points, that’s why such a significant decline was quite an unpleasant surprise. The components of the report show that the future economic prospects fell from 79.2 points to 71.3 points.

This week, investors will continue monitoring twists and turns of American politics, and the country is scheduled to report on several macroeconomic indicators, including the Retail Sales.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Euro is looking up. Overview for 18.11.2020

EURUSD continues growing while the USD is waiting for stimulus.

The major currency pair is looking up and may continue moving upwards as long as the USD is pressured by the possibility of a new stimulus package for the American economy. The current quote for the instrument is 1.1880.

Yesterday, it became known that the Republicans confirmed their approval of the possibility of a new stimulus package for the US economy. But now it's $500B, although earlier it was $1-1.5T. The amount of half a billion may even be approved by Donald Trump if required but the American economy needs more considerable support than this.

As a matter of fact, the USD exchange rate is already including this possibility of additional stimulus, and the American currency may continue weakening while policymakers are discussing it. The USD quickly correct right after they finally decide on the exact sum.

According to the statistics published yesterday, the Industrial Production in the USA added 1.1% m/m in October against the expected reading of +1.0% m/m. At the same time, on YoY, the indicator was -5.3% after showing -6.7% in the previous month. The     Capacity Utilization Rate was 72.8% in October, which is better than market expectations of 72.3%.

It’s quite interesting that the Manufacturing Production also improved in October – it showed +1.0% m/m.

Yes, the Industrial Production balanced a little bit in October but the growing number of new coronavirus cases in the USA may cause a lot of problems at factories and manufacturing facilities in the future.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Pound is correcting downwards after all. Overview for 20.11.2020

GBPUSD had been keeping its positive momentum throughout the entire week but failed to continue growing on Friday.

The British Pound is retreating against the USD at the end of this trading week. The current quote for the instrument is 1.3257.

The statistics published in the morning showed that the Retail Sales in the United Kingdom added 1.2% m/m in October and that’s an excellent result because the expected reading was zero. According to the revised data, in September the indicator expanded by 1.4% m/m. The positive momentum continues and that’s a good signal for the country’s economy

However, a stable impulse to support the British economy strongly depends on consumer sentiment. Due to Brexit, which is rather stressed and unclear, the retail sales in the country might slowly fall in the future just because no one can be sure of how everything is going to happen. Lack of clear directions in relations with the European Union and more complicated conditions for the British companies early in 2021 may alarm consumers, thus directly influencing their spending.

At the same time, the GfK Consumer Confidence in the United Kingdom showed -33 points in October, the same as expected, after being -31 points in September, and that’s a good signal that provides insight into the behavior of an average consumer in the future. They will cut down their expenses.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

EURUSD is in suspense again. Overview for 24.11.2020

EURUSD dropped yesterday but managed to reach stability today; at the moment, the pair is monitoring the external background.

The major currency pair lost its positive momentum last night and is currently trying to restore it. The current quote for the instrument is 1.1855.

The statistics published by the USA yesterday turned out to be better than expected and, as a result, somehow alleviated market concerns about the economic slowdown. For example, the preliminary report on the Manufacturing PMI from Markit showed 56.7 points in November after being 53.4 points the month before. The same indicator for the service industry improved up to 57.7 points after being 56.9 points in October.

As for the Euro Area, the PMI data was rather sad. The Manufacturing PMI dropped to 53.6 points in November after being 54.8 points in the previous months. The Services PMI went from 46.9 points in October to 41.3 points this month.

However, the optimism on the market is somehow supported by the good news about the creation of vaccines against the Covid-19 – the was some information about the third one. This news prevents the USD from strengthening and maintains an interest in the European currency despite weak macroeconomic reports.

Today, one should pay attention to the Consumer Confidence from the Conference Board in the USA for November, which is expected to get worse.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Euro remains strong. Overview for 26.11.2020

The major currency pair continues growing on Thursday afternoon; investors are still interested in risks.

EURUSD continues rising in anticipation of a soon defeat of the coronavirus pandemic. The current quote for the instrument is 1.1938.

Market players remain positive – they do count that an effective vaccine against the Covid-19 will be available in the nearest future. Such expectations help the Euro to rise high.

The statistics published yesterday showed that the New Home Sales in the USA went up to 999K in October after being 959K in the previous month.  The actual reading is better than expected and that’s a quite logical response of the country’s population to low interest rates.

However, there is something interesting. The Personal Income in the USA was -0.7% m/m in October after being +0.9% m/m in September. At the same time, the Personal Spending improved by 0.5% m/m after expanding by 1.4% m/m the month before and against the expected reading of +0.4% m/m. The revised report of the University of Michigan of the Consumer Sentiment showed 76.9 points in November after being 77.0 points in October.

If the White House and the FOMC do not expand the stimulus program, consumer spending will start declining in response to a possible slowdown in the economic recovery rate.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Australian Dollar renewing highs. Overview for 30.11.2020

The Australian Dollar in pair with its American “colleague” is aiming up high, currently trading at 0.7387.

The Chinese statistics turned out positive. The industrial PMI in November grew to 52.1 points against 51.4 points previously. The same indicator in services grew to 56.4 points, which was still higher than the forecast 56.0 points.

Stability and positive moods in China are extremely important for Australia because they have long been key trade partners.

The Australian statistics is less important today, showing the ambiguity in individual crediting issues in October.

On Monday, which is the last trading day of the month and autumn, the interest in risks in the world market remains high. The USD stays depressed, letting other currencies restore.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

EURUSD quotations rose to the of 36 months. Overview for 02.12.2020

This December, the EURUSD pair is full of optimism, renewing the highs of the last 36 months. The current quotation is 1.2005. Previously, the instrument was so expensive on April 30th, 2018.

The interest to risk on various platforms has increased tangibly. This is connected to the anticipation of new stimuli in the US finance and the restoration of global economies. Specifically, I mean the bill discussed in the USA yesterday: it presumes that stimulation by 908 billion USD must start right away to have a visible effect on the economy by March 31st. Inside this package, some 228 billion USD must be allocated for supporting hotel business and services, including restaurants and other small businesses. This is a very good signal for the US economy: it has always got out of the toughest crises fighting at wars and supporting small business. Naturally, the second option is safer and more appealing.

Also, dialog resumed between the US Secretary of the Treasury and the speaker of the House of Representatives. The politicians had held the distance for a month, creating excessive tension in society.

Also, the world is quite optimistic about the vaccine against the coronavirus, believing that it will soon appear. All this drowns the dollar almost literally.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Euro relies upon the interest to risk. Overview for 04.12.2020

Yesterday EURUSD renewed another high of the last 36 months and remains strong this morning. Investors have never been so sure of what they are doing — so they keep buying. The current EURUSD quotation is 1.2151.

The statistics is generally positive for those who are ready to buy.

For example, retail sales in the EU in October grew twice as forecast — by 1.5% m/m against 0.7% m/m and a preceding slump by 1.7% m/m. This might mean that consumers are more confident than before

The Unemployment Claims index (USA) demonstrates a decline to 712 thousand against 787 thousand a week ago. A decline was expected, yet the forecasts were much more conservative. The market is stabilizing smoothly, improving its positions — after all, the USA have always known how to employ crowds.

The PMI in Services officially dropped to 55.9 points from 56.6 points earlier. Meanwhile, Markit tells us about an increase to 58.4 points against 57.7 points. The truth is normally somewhere in between.

Today much attention will be driven to the labor market statistics for November in the USA. The unemployment rate could have fallen a bit, while the NFP could have grown, though less prominently than earlier. As always, the devil is in the details. The dollar is weak, and any problems can become a serious blow to it.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The yen could be stronger. Overview for 08.12.2020.

The Japanese yen in pair with the US dollar has paused. The current quotation is 104.10.

There is no need for safe-haven assets now – investors are full of hopes for a bright future with global vaccination and look at risks calmly.

The statistics issued today in Japan has shown that household spending in October somewhat regained balance. The indicator grew by 1.9% y/y against forecasts of 2.7% - weakness is obvious. However, in September, the indicator dropped by 10.2% y/y at once, so, every positive bounce here is good.

Average earnings in October shrank by 0.8% y/y after a decrease by 1.3% y/y in September.

The banking sector shows itself well: the volume of crediting in November grew by 6.3% y/y against 6.1% y/y in October. This means that the real sector is activating.

The final GDP values in the third quarter demonstrate growth by 5.3%, which is much better than forecast and prelim values of 5%. There are hopes – connected to active spending of the population – for further recovery in the fourth quarter.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The pound is correcting. Overview for 10.12.2020

The pound long managed to balance in zero gravity thanks to the weak USD and surprising overall optimism provoked by the perspectives of total vaccination from COVID-19. The current quotation of GBPUSD is 1.3322.

However, Brexit risks are becoming more and more obvious: the talks go on and on but no serious decisions are made. Meanwhile, everyone sees that there is no time left neither for consideration, nor for ratification. This means that the tough scenario of Brexit is becoming more probable and realistic every day.

The statistics issued today show that the RICS House Price Balance in November deteriorated slightly, amounting to 66% against 67% before. This is not the brightest news that can enforce the GBP, still, it is enough for understanding the general state of affairs in the economy.

The industrial production in October grew by 1.3% m/m after growth by 0.5% m/m in September and forecast growth by 0.4%. As for the components, the manufacturing production grew by 1.7% m/m after an increase by 0.2% in September. The construction output grew by 1% m/m, and this is a worse result than in September (2.9% m/m).

The British GDP for October has also been published – the economy grew by 0.4% only after an increase for 1.1% in September. However, the result was forecast.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

EURUSD is stable early in the week. Overview for 14.12.2020

The Euro draws confidence from the market and is ready to continue its growth.

The major currency pair is looking pretty stable despite a lack of progress with vaccines and a lot of high hopes for them. The current quote for the instrument is 1.2142.

It became known that the US Centers for Disease Control and Prevention (CDC) had already made COVID 19 vaccine recommendations. What does it mean? Everything is quite simple: the cure is ready and waiting for everyone who is willing to get vaccinated. 

This optimism about vaccines is what makes investors’ interest in “safe haven” assets go down and allows them to continue buying. At the same time, the pure logic says that many assets, including indices and currencies, climbed too high – in case of any doubts, they may start plummeting very quickly.

There will be no interesting statistics from the USA today but the Euro Area will give causes for reflection. For example, it is scheduled to report on the Industrial Production, which is expected to add 1.8% m/m in October after losing 0.4% m/m in September. No one is expecting any miracles but the report may provide insight into what is happening in the sector.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Pound is soaring. Overview for 16.12.2020

GBPUSD manages to rise even despite the Brexit complications.

The British Pound is growing against the USD on Wednesday afternoon. The current quote for the instrument is 1.3478.

So far, British and European policymakers have managed to agree on further negotiations but several extra days are very unlikely to help them in talks since the entire year wasn’t enough.

Today’s statistics published by the United Kingdom showed that the Consumer Price Index was only +0.3% y/y in November after being +0.7% y/y the month before and against the expected reading of +0.6% y/y. The Core CPI also slowed down, +1.1% y/y against market expectations of +1.4% y/y

The PPI Input showed +0.2% m/m in November, the same as in the previous month, although it was expected to add 0.4% m/m. The PPI Output added 0.2% m/m against the expected reading of +0.1% m/m.

So far, the Pound isn’t paying much attention to the statistics (it’s wrong) and truly believes that British and European policymakers are about to come to an agreement to avoid the “hardcore” Brexit.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.